Chatham Asset Management

This type of transaction doesn't always involve a manufactured default either.

A hedge fund named Chatham Asset Management lent to newspaper chain McClatchy Company in a way that market participants believe was designed to give a big payout to derivatives traders betting that the parent company would keep paying its obligations.

So as you can see, these things can work in either direction.

Now, while it's easy to appear wise after the event, let's review some lessons that can be learned from the crisis.

Now, it made from that, and it eventually went into bankruptcy.

And then came out of bankruptcy owned by Chatham Asset, a hedge fund company.

You don't want to be owned by a hedge fund company.

I mean, Chatham doesn't care about journalism.

She's a former McClatchy employee.

And she relates that one of the gallows humor jokes that used to circulate in the newsroom about the company's current owner, Chatham Asset Management now owns the McClatchy Company.

The joke was, well, at least we work for the less evil hedge fund.

Between 2011 and 2019, private investment funds stake in the country's newspaper business rose from 5% to 23%.

It filed for bankruptcy in 2020 with liabilities almost twice its assets.

It was then taken over by hedge fund Chatham Asset Management LLC.

In 2024, it merged McClatchy with Accelerate 360, a publisher of lifestyle magazines and including US Weekly and InTouch Weekly.

Hedge funds are notorious for stripping companies for parts.